Analyst Brent Thill from Jeffries has downgraded Palantir Technologies (PLTR) stock from “Hold” to “Underperform”, citing high valuation and slowing growth as major concerns. Here are three key points about the downgrade:
1. Overvalued: Thill believes Palantir’s stock price is overpriced, with a surge of 237.26% year-over-year since 2023 driven by strong partnerships and adoption of its Artificial Intelligence Platform. However, he thinks the company’s current valuation is too high.
2. Insider selling: CEO Alex Karp has sold around 40 million shares in the past three months, worth over $1.9 billion, which could lead to further selling pressure on the stock.
3. Retail ownership decline: The recent S&P 500 inclusion led to a decline in retail ownership from 42% to 42%, while institutional investors’ ownership increased from 25% to 27%. This shift may stabilize prices but is less favored by retail traders, potentially leading to lower stock prices.
The analyst’s target price of $28 per share represents a significant downside of -39.58% from the current price of $64.35. With 16 analysts giving Palantir a one-year price target range of $11-$75, investors should carefully consider these factors when making their investment decisions.
Source: https://finance.yahoo.com/news/three-reasons-why-jeffries-told-123652915.html